Friday , May 20 2022

The strategist expects double-digit growth in the stock market by the end of 2019


If you want to get an attractive return with your investment by the end of 2019, you definitely need to invest in the S & P 500. According to the American strategy of the American bank Vells Fargo, the US stock market is facing a "monster ralli" that will end next year, raise the US leading index to 3,079 points. Based on the current index level, this would be an increase of more than twelve percent. Compared with the US CNBC channel, he says a recent market correction is a very good opportunity to enter. For many companies, this would unlock a lot of the values ​​that need to be raised now. In other words: Many actions are now worth the cheap and therefore offer a chance to buy.

The Bank of America indicator also signals the possibility of the input level

His opinion is contrary to the opinion of many other experts. More and more market observers currently point to an approximate end of the current economic cycle. If this ends in the next year, then the growth of the company's profits and profits will decline, and this should then be reflected in the assessment. In addition, there are geopolitical factors of uncertainty that could negatively affect future development. This includes the difficult predictability of the Trump administration, a continuous trade dispute with China and, in Europe, a budget dispute between the European Union and the government in Italy and the still unclear current of Brekit.

Still, the strategic Vells Fargo Harvei is currently seeing a very good chance of entering. And he is not entirely alone with this view. For example, CNBC experts point to an indicator of the Bank of America, which was true in 94% of the past. It is a feeling of the so-called. Selling pages. This includes market players who sell financial products as intermediaries, such as investment banks. And their mood in October dropped to the lowest level in 14 months. In other words, the mood in this area is currently extremely negative and bad.

350 billion dollars for the purchase of shares by the end of the year

With 61.9 points, the index, which gives an indication of the number of shares currently held in portfolios, signals great optimism and thus signal sales. It has fallen recently from 56.9 to 56.4 points. In 94 percent of cases, when the index was so low or lower, the market made a positive return for the 12 months that followed, the Bank of America said. The middle return was 19 percent – which additionally supports Harvey's thesis that, after the price drop, we currently have a lot of "value" on the market and therefore it is worth counter-cyclical and in terms of the counter-entry strategy.

In this context, the current assessment of Manfred Schlumberger, a member of the management board of StarCapital, is also interesting. He sees good prospects for a stock market at the end of the year in stock markets. One of the reasons for this: only in the US, more than $ 350 billion in stock purchases will be extremely late at the end of the year. "The cycle of the stock market enters its final phase, historically characterized by high volatility, especially upward," he said in a recent comment. Therefore, the Stock Exchange party did not finish, so its conclusion.

Central banks end the stock market cycle, not senility

However, investors should also be careful. For recent stock market losses, it could be interpreted either as a sign of a growing crisis on world stock exchanges or as an excitement in the mature, advanced cycle market since 2009. However, according to Schlumberger, in the past, basically no stock market has died since age, but was generally "killed" by central banks. The growth of inflation, caused by a chain reaction of strong growth, wage growth and commodity prices, has in the past forced the central banks to raise interest rates, leading to a collapse of the economy. Historically, the initial recession has always been accompanied by a stock market decline, according to the portfolio of managers.

Although there is evidence that the economy slows down, but not the assumption of a recession. In addition, the StarCapital Board of Directors further notes that price ratios in Europe, Japan and emerging markets are well below pre-IPO levels in 2000 and 2008, which also indicates some market resistance. Even on this side, the end of today's market cycle can not be expected, so Schlumberger's conclusion is. Put it differently, so investors do not need to worry too much until inflation pending. For so long, central banks can keep their process of very gradual and slowing down the normalization of monetary policy. Only when this changes, if the current cycle of the stock market is in progress.

Video: Growth of assets at low interest rates

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